S&P 500 Earnings and Gross Buybacks With U.S. corporate earnings on the rise, share buybacks in 2025 are expected to be more popular than cat videos—because apparently, money can be just as cute! Image: Deutsche Bank Asset Allocation
Valuation – Shiller Cyclically Adjusted Price/Earnings Ratio U.S. equity valuations have benefited from structural tailwinds but have recently overshot, leading to concerns about overvaluation, particularly in large-cap and growth stocks. Image: Goldman Sachs Global Investment Research
S&P 500 and Forward Earnings Estimates While Wall Street’s earnings expectations for 2025 are high, they may not fully reflect the underlying economic conditions, suggesting a need for careful consideration by investors. Image: Real Investment Advice
Proportion of Companies Beating Earnings Estimates In Q3 2024, the proportion of U.S. corporate earnings exceeding expectations reached 77%, while in Europe, it was 62%, both surpassing their historical median levels. In contrast, the proportion in Japan was only 39%. Image: Deutsche Bank Asset Allocation
Proportion of Companies Beating Earnings Estimates In the third quarter of 2024, U.S. companies outperformed their counterparts in Europe, Japan, and emerging markets, with a higher percentage exceeding earnings estimates. Image: Deutsche Bank Asset Allocation
Valuation – S&P 500 Earnings Yield Plus 10-Year U.S. Treasury Yield Minus CPI The current low yield environment for both U.S. stocks and bonds relative to inflation presents a challenging landscape for investors, prompting many to explore alternative investment strategies to achieve desired returns. Image: Bloomberg
Mentions of AI During Earnings Calls The high percentage of S&P 500 companies mentioning AI in their earnings calls reflects both a notable trend and a fundamental change in how businesses are engaging with technology and innovation. Image: Goldman Sachs Global Investment Research
Earnings Sentiment (Analyst Upgrades Minus Downgrades Across Markets) Earnings sentiment in the S&P 500 continues to improve, potentially setting the stage for continued market growth. Image: Goldman Sachs Global Investment Research
S&P 500 Earnings Revisions Breadth and S&P 500 YoY Performance The divergence between earnings revisions and S&P 500 performance suggests that investors are looking beyond current analyst estimates, potentially betting on stronger-than-expected corporate performance. Image: Morgan Stanley Research
Estimated Earnings Impact of 1pp Change in Statutory Tax Rate A one percentage point change in the corporate tax rate can have a measurable impact on U.S. corporate earnings, with small companies often feeling the effects more acutely than their larger counterparts. Image: Goldman Sachs Global Investment Research
S&P 500 Consensus Quarterly Earnings Actual and Consensus Estimates Despite a promising earnings outlook that could sustain market strength, investors would be wise to consider potential risks and already stretched market valuations. Image: Morgan Stanley Research